By Jenny W. Hsu
Crude futures made tepid gains in Asia on Monday morning--driven mainly by a weaker dollar--as investors await a report on how compliant major global producers have been with regard to the recent production-cut deal.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $45.15 a barrel at 0158 GMT, up $0.26 in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose $0.44 to $46.59 a barrel.
Because oil is traded in U.S. dollars, a weaker dollar means cheaper prices for foreign traders. The dollar was last up 0.2% at 92.05 according to the Wall Street Journal Dollar index, which compares the dollar to a basket of currencies.
Trading is likely to be quiet today because U.S. markets are closed for Martin Luther King Jr. Day.
"Market attention will likely revolve around this Friday's inauguration of U.S. President Trump as well as China's fourth quarter gross domestic product print," OCBC said.
President-elect Donald Trump is a supporter of relaxing rules on U.S. oil drilling. His campaign platform included a plank on accelerating the country's energy independence. That could mean lower U.S. oil imports and may bode badly for other producers who are competing for market share.
Last week, the U.S. Department of Energy said domestic oil production would likely rise to an average of 9.3 million barrels a day by next year. The increases "largely reflect increase in federal offshore Gulf of Mexico production," it said.
Goldman Sachs expects, based on a the current oil rig count, that U.S. oil production will increase by 235,000 barrels a day year-over-year in 2017 if taking into account the backlog of oil wells being gradually brought back to active drilling between last quarter and the first half of this year.
The release of U.S. oil output and inventory for the week ending Jan. 13 will be delayed one day to Thursday this week due to a public holiday.
This week, market participants will also be paying attention to the monthly production data released by OPEC on Wednesday. Analysts and traders will be combing through it for any early clues or comments on the production-cut deal signed late last year.
In early December, OPEC and 11 other non-members such as Russia, agreed to slash their combined output by nearly 2 million barrels a day. In an attempt to assure compliance, OPEC set up an oversight committee to keep participating nations' production in check.
Nymex reformulated gasoline blendstock for December--the benchmark gasoline contract--rose 41 points to $1.3751 a gallon,while December diesel traded at $1.4507, 101 points higher.
ICE gasoil for November changed hands at $425.00 a metric ton, up $7.25 from Friday's settlement.
Write to Jenny W. Hsu at firstname.lastname@example.org
(END) Dow Jones Newswires
January 15, 2017 22:43 ET (03:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.